AlphaKing.com
Weekly Trend and Trade Review	January 22, 2010
Trader Talk The short term momentum oscillators remain negative, non-confirming the bullish stance of the AlphaKing Trading indicator. The accumulation/distribution profile has turned negative, with four heavy volume distribution days over the past week of trading. The leadership profile has weakened considerably, though remains positive for now, with 160 new 52 week highs, versus 67 new 52 week lows. The 4% rule has turned negative, while Federal Reserve policy remains positive. The VXO volatility indicator closed the week at 26.13, showing a big up spike in fear. This week delivered the plunge that confirms the wave 2 bear market rally peak is in, and the next down-leg of the secular bear market underway. While this may be a long drawn out process, the current down leg should see the stock indexes well south of their March 2009 lows before it completes. Traditional seasonal trends have us looking for a rally to start the new year. The Presidential cycle suggests a grim 2010. The Benner-Fibonacci cycle is fast approaching the end of the bullish period, with a crashing bear going forward expected into 2011. The AlphaKing combination cycle sees a rally into early March. Summary: All the investment ducks bar one - our AK Trading Indicator - suggest the major stock indexes have flipped into bear corrective mode, and we expect our proven trend following indicator to join the bear club sometime next week. Note that the AK Trading indicator is the most reliable of all technical indicators at delivering performance over the long term, and that one dictates all of our trading decisions. That indicator sometimes changes trend a little late, sometimes a little early, and sometimes exactly spot on. We will wait for the trend turn to land for real before acting, as 2009 proved that not every threatened corrective attempt is the real thing. Risk of a harsh bear plunge does remain extreme, and the prime reason we have held so much cash along with some select longs over the past month or so of topping action. Our research shows that we can expect a four week plunge to retest - and eventually break below - the 200 day moving averages going forward for the stock indexes (purple lines in the charts below.) This is unlikely to be a straight down crashing move - not without further topping action - and a stabilization rally attempt that eventually fails is likely to unfold early next week. We expect to be switching our longs to short positions as that rally destined to fail unfolds, as our trend indicators flip from bull to bear, and making money switches from buying on dips to selling short on rallies. Have a great weekend! 401K investors should have ½ of their portfolio invested in a stock index, or aggressive growth, mutual fund, with the other ½ remaining in a money market fund. The Index portfolio is ½ invested in QQQQ with the other ½ remaining in cash. Kevin Wilde, Chief Trading Strategist, AlphaKing.com Portfolio Update Archive Trades: Index Portfolio: No new trades GrQ/4 ETF Portfolio: No new trades GrQ/8 Hedge Fund Portfolio: No new trades GrQ/25 Small Cap Portfolio: No new trades Performance: Portfolio Long Only Long/Short Index Portfolio 2010* (1.8%) (1.8%) Annual 1973-2009* 13.6% 18.8% GrQ/4 Portfolio 2010* (1.7%) (1.7%) Annual 2000-2009* 13.6% 20.3% GrQ/8 Hedge Fund Portfolio 2010* 2.9% 2.9% Annual 1999-2009* 5.8% 22.3% GrQ/25 Small Cap Portfolio 2010** 0.7% N/A Annual 2001-2009** 16.0% N/A GrQ/25 M100 NASDAQ S&P500 DJIA * Compounded results before commissions, dividends, or interest income during those periods when portfolio invested in money market funds or short. Back-tested data used to compile results prior to 2004, actual trades since. ** Performance tracked by Marketocracy.com, and results include commissions of $0.05 per share per trade. Trade the AlphaKing Portfolios at FolioFN.com Current Positions: Index Portfolio* Position Entry Date Entry Current Profit/Loss Long QQQQ 12/31/2009 46.25 44.16 (4.52%) GrQ/4 Portfolio* Position Entry Date Entry Current Profit/Loss Long EWS 12/24/2009 11.35 11.06 (2.56%) Long IYM 12/24/2009 60.63 57.94 (4.44%) Cash x 2 GrQ/8 Hedge Fund Portfolio* Position Entry Date Entry Current Profit/Loss Long EVVV 12/24/2009 13.77 14.72 6.90% Long FIG 12/29/2009 4.64 4.88 5.17% Long CELG 12/24/2009 56.61 58.57 3.46% Long RYAAY 12/30/2009 26.80 26.46 (1.27%) Cash x 4 GrQ/25 Small Cap Portfolio** Position Entry Date Entry Current Profit/Loss Long CQP 12/24/2009 11.80 15.20 28.81% Long KFN 12/29/2009 5.30 6.21 17.17% Long SMOD 12/24/2009 6.70 6.95 3.73% Long NM 12/24/2009 6.18 6.38 3.24% Long UMC 12/29/2009 3.76 3.86 2.66% Long EV 12/30/2009 30.62 30.82 0.65% Long GFF 12/24/2009 12.34 12.34 0% Long FRZ 12/30/2009 4.44 4.43 (0.23%) Long THC 12/30/2009 5.26 5.19 (1.33%) Long JBLU 12/24/2009 5.73 5.58 (2.62%) Long INSU 12/30/2009 22.10 21.50 (2.71%) Long KLIC 12/30/2009 5.35 5.00 (6.54%) Cash x 13